Solutions to revive Chennai real estate market

CHENNAI: The thumb rule of Demand and Supply is the determining factor for price changes for any commodities – movable or immovable. This is being observed across the globe, especially where buying and selling is done for the purpose of investment or liquidating the same. This is felt more, especially in a very un-organized and un-regulated market like real estate, as this segment has also become a hot and buoyant investment destination these days.

Chennai, a booming metropolis, known for its conservative traditions and predominantly an end-user market in real estate is slowly changing and trying to catch up with other metro destinations like Mumbai-Navi Mumbai, Delhi-NCR, Bangalore and Pune. In the last few years a number of investors are coming to Chennai for real estate shopping. These days, lots of builders and lay-out promoters are trying to showcase their properties as ideal medium to long term investment options in the peripheries and suburbs of Chennai. But the fact remains that a bulk of it are still unsold for obvious reasons.

The recent stagnation in real estate across India has a telling effect in the Chennai realty market too, probably more than its peers and perhaps for some of these reasons:

Chennai market has seen positive growth even during the recession period of 2007-2008. In terms of property prices Chennai was commanding the number one position in South India and prices have been going up unabated, for almost 6-7 years. So, a correction in prices was always expected to happen.

The suburbs especially in the OMR, GST Road and Sriperumbudur belt have been seeing unprecedented supplies and launches of New Projects. But the developmental activities are very slow and snail-paced and have put lots of doubt in the minds of customers.

The prices have been prohibitively high. The moment some new infra projects are announced, the promoters try to cash-in by factoring it in the price, but later it is either shelved or scrapped because of either economical and physical hurdles and hassles or both.

The volatility in Home Loan interest rates is also a contributing factor.

The customers now have a lot of choices. So they are confused too. There are almost 60,000 units available which are either finished or under various stages of development in the OMR belt itself. About 60 per cent of these are unsold. The overall availability, in and around Chennai, could touch about 100 thousand housing units, but only a few are in the affordable segment. There is still a demand for housing units in and around Chennai and this could only go up in the coming years. But most of these are price and location centric (within Greater Chennai).

Some solutions for these problems are:

Speed-up Infra Developmental Activities in suburbs like improvement in the road and transport network, build underground sewerage and water lines and bring quality and affordable hospitals and medical facilities etc.

Build more of smaller sized especially 1 & 2BHK housing units and make them more affordable without any add on costs.

Offer concessional home loans at around 8 per cent per annum and completely do away with other hidden costs like processing fees etc for small sized units of up to 800 sq ft.

Implementation of solutions, more than the realization of the problems is what the need of the hour is.

CHENNAI: Clearing the air over rules governing construction of buildings in coastal regulation zones (CRZ), Chennai Metropolitan Development Authority (CMDA) has started issuing approvals for residential projects on the beachfront. The road abutting Elliot’s Beach in Besant Nagar will soon house one such project, a three-storeyed residential building being promoted by a prominent city builder.

CHENNAI: Chennai has always been known for its conservative outlook, and this characteristic, naturally, was reflected in the city’s architecture. Through the 1960s right up to the late 1980s, houses were built to a standard template, and this extended to office buildings too. The façade of independent houses was the same, whether the home was built in Gandhinagar or Royapettah or Rutland Gate. Toilets were almost always outside the house, at the back; it took a long time for the conservative Ch

CHENNAI: Kerala-based Malabar Group, promoters of jewellery retailer Malabar Gold and Diamonds, has planned to diversify into development of townships, commercial hubs, e-commerce and organic farming among others.

CHENNAI: In the past year, Suresh of S Promoters has sold about 80 per cent of his properties in North Chennai. However, his South Chennai properties still remain unsold. “Today, there is an oversupply in the South Chennai market. But in the northern part of the city, the ratio of availability and demand is at par. Also, in North Chennai, people can buy flats at two-third of the rates of South Chennai,” he says.

CHENNAI: If you are looking to buy property in the budget range of Rs 60-70 lakh, Perungudi can be the end of your search as the locality offers a number of housing options. With factors like well-built social infrastructure, proximity to IT companies and seamless connectivity, Perungudi comes across as an ideal destination for an end-user. Here’s why:

CHENNAI: As Chennai eagerly awaits the advent of the city’s Metro rail services, the real estate industry too, watches with bated breath. As the rapid transit services roll out in phase after phase in city after city, both transport corridors and real estate have had a love-hate relationship with each other.